strategies off mcg companies in rural market

7/31/2019 Strategies Off Mcg Companies in Rural Market

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MBA Projects | HR Professionals | Finance & Money | Media Live!1

Strategiesof FMCG

Companiesin RuralMarket
http://www.managementfunda.com/http://www.hrgyaan.com/http://www.financenmoney.in/http://www.mediagyaan.com/http://www.mediagyaan.com/http://www.financenmoney.in/http://www.hrgyaan.com/http://www.managementfunda.com/


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Sponsers

http://ManagementFunda.com

http://HRGyaan.com

http://Mediagyaan.com

http://FinancenMoney.in
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Introduction Fast Moving Consumer Goods (FMCG), also known as

Consumer Packaged Goods (CPG), are products that have

a quick turnover. The classification generally includes a wide range of

frequently purchased consumer products including:toiletries, soaps, cosmetics, teeth cleaning products,shaving products, detergents, and other non-durables suchas glassware, bulbs, batteries, paper products and plasticgoods.

The Indian FMCG sector is the fourth largest sector in theeconomy with a total market size in excess of US$ 13.1

billion.


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Also, the rural market has been growing steadily over theyears and is now bigger than the urban market for

FMCGs (53% share of the total market) with an annual

size in value terms currently estimated at around 50,000

crores. THE Indian FMCG is realizing the that most of the India

lies in the rural India so rural marketing has become the

latest mantra of major FMCGS like

HLL, COLGATE PAMOLIVE, BRITANNIA,MARICOINDUSTRIES.

The FMCG companies are understanding the needs and

latent feelings of rural people i.e. being very well aware of

rural scenario Before Launching their products and create

a winning strategy.
http://www.managementfunda.com/http://www.hrgyaan.com/http://www.financenmoney.in/http://www.mediagyaan.com/http://www.managementfunda.com/http://www.hrgyaan.com/http://www.mediagyaan.com/http://www.financenmoney.in/http://www.hrgyaan.com/http://www.managementfunda.com/


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All biggies in the industry be it HLL, Marico, Colgate-

Palmolive or Britannia, are showing deep interest in rural

India Inspite of the major hurdles in tapping the ruralmarkets like lack of infrastructure, Physical distribution

,problem of channel management, sales force management.

Rural India has to be the hottest target in future for major

FMCG Players who are now learning to play well in ruralIndia.


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7/52MBA Projects | HR Professionals | Finance & Money | Media Live!7

4PS OF NIRMA

Packaging

Price

Planning Promotion



SUCCESSFULLY DIVERSIFYING

INTO PREMIUM BRANDS

Nirma is today ranked among India's top 20 .mostdistributed brands. It has built up a 30% market share inthe premium detergent segment and also achieved greaterthan 20% share, in less than two years, in the premiumsoaps market.

Today Nirma has diversified into personal care marketwith Shikakai, Beauty Shampoo, and toothpaste and hasalso launched the Nirma brand of iodized salt.


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NIRMA - SWOT ANALYSIS

Strengths

Weakness

Opportunities Threats



THE BRITANNIA TIGER LAGAAN MATCH

You needed to purchase a 100 gm. Pack of TIGER biscuitsfor which you will get a special "Britannia Lagaan

Booklet". 10000 early birds will win a prize. There is also

the possibility of being selected in the team that will play

against the "Lagaan XI" team.



HOARDINGS

There are hoarding, which are put up by the company inthe rural areas. The hoardings are mostly put up with

complete information regarding the product. The

information is given in the local language in order to let

people know about the product. The hoardings also havethe mascot tiger which emphasises a strong healthy

individual.


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T.V.

The various ad campaigns throughout the country aredone by preparing a single advt but the language in which

it features is according to the regional language of that

state. The ads include famous personalities like Saurav

Ganguly. The ads mainly focus on the children andemphasise a strong diet for a healthy mind and body.



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Ps OF TIGER BISCUITS

Pricing & packaging:

Packing Price

250 gms Rs. 10

100 gms Rs. 4 75 gmscoconut Rs. 5



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Packaging

The products are packed in airtight plastic wrappers in

an attractive bright red and yellow colour, which catches

the eye and is an important feature to market a product

in rural areas



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Place

The distribution network is very strong.

Manufacturing Plant

Location

C & F Agent: At district level in various states of India

Wholesaler: At taluka levels in various states

Retailer: Retailers in villages are supplied by the

wholesaler at the taluka level

Final Customer



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Positioning Positioned mainly for the rural segment and with a new

slogan "Eat healthy, think better", as a brand of

premium quality with factors pertaining to health and

needs of the consumer being the main factor.


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Competition

From local players in many states who infringe with low

quality products and similar packaging. Since the rural

customer depends mainly on the packaging available, it is

easy for competitors to sneak in the market affecting themarket share of TIGER.


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ROLEPLAY


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INTRODUCTION

HLL's Nihar coconut oil achieved amarket leadership in the ruralcoconut oil market in October 2000.

Nihar's market share stood at 25.4

per cent in volumes, while that ofParachute was at 23.6 per cent. Thetotal volume of the rural coconut oilmarket is around 54,000 tonne,growing at 6-7 per cent annually.

HLL believes that low-unit pricepacks will lead to substantialconversions of the loose oil consumersto packaged and branded oils.


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INTRODUCTION

While Parachute's growth rate fellfrom 14 to 6 percent in the first half of2000-01, nihar Perfumed Coconut Oilcontinued to grow well, while Clinic All

Clear Dandruff Oil registeredsubstantial growth of more than 50%.

Nihar Amla Oil was also launchedaround the end of the year, to exploitopportunities in this segment of hair

oil.


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MARKETING MIX

Product: Packaging innovations Nihar, India's only double filtered

coconut oil has made a change inpackaging and logo.

Nihar has consistently been bringing

innovations to its consumers. It was the first to introduce the wide

mouth jar and pouches packaging.

The essence of the new packaging isto bring about practicality in daily

usage of the Nihar coconut oil. HLL believes that low-unit price

packs will lead to substantialconversions of the loose oil consumersto packaged and branded oils.


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Process

The double Filtration process involvesthe production of filtered coconut oilfrom copra.

The copra is then crushed at a higherpressure.

The filtered coconut oil is mixed withspecial quality silica and recirculated,this continues until the requiredclarity is achieved.

HLL believes that low-unit pricepacks will lead to substantialconversions of the loose oil consumersto packaged and branded oils.


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The micro-credit concept, that

impacts 45 lakhs women belonging to

3.33 SHGs in the State, creates wealth

for the members of the groups.

The micro-finance collected in theState, through savings as well as

institutional loans, is around Rs 800

crore.


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Promotion Nihar attracts a large consumer

preference in Bihar, Uttar Pradesh,Madhya Pradesh, Rajasthan, AndhraPradesh and Bengal.

Promotional activities are region-specific and locally flavored.

The customers in the rural area arevery price sensitive, hence, greatemphasis is laid on the price factor.

They use advertising through T.V.Nihar's "kudrat ki shakti" ad clickedin the market place


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PROBLEMS & STRENGTH

PROBLEMS FACED BY NIHAR

Strong competition from otherplayers in the market.

Pricing is a critical issue in the

branded coconut hair oil market.

STRENGTH OF NIHAR

Nihar can gain market share from

conversion of loose oil consumers. Nihar has a very strong distribution

network.


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12 new brands added in the

portfolio.

A national entity

1,200 distributors across the

country.

Highest seller in TamilNadu after

HLLs Hamam.

Coca cola companyusing the

network of Medimix to sell its soft

drink concentrate brand Sunfill.


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Medimix soap

5 plants of manufacturing indifferent states.

Soap made from 18 herbs in acoconut oil base

One-stop-cure for a range ofhealth-related problems.

Offers total health protection andaddresses each of your individualneeds.

Widened the strategy by placingthe soap on a value-for-moneyplatform

It got an ORG rating of numbernine


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Competitors-Mysoresandal,Nirma,Jai Cintholfresh,Pears,Luxinternational,Liril,etc.

6th highest seller in south zone

with 1,873 tonnes. financial targets would be to

build their organisation to a Rs1,000-crore entity in the next fiveyears.

This will be done by growing inthe categories they are present inand eventually by getting intonew areas of growth


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Strategies

The story of Medimix is theevolution of a home-grownproduct... from idea to researchto manufacture, packaging,distribution and marketing, all

done by a family proprietaryconcern.

Place strategy-targeted the villagekiranawala, their best friend andlocal influencer of decisions so far

as buying habits go. Village melas were attended.


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Price strategy- slow and steadyincrease in price of soap from thelaunch to present price.

Promotion strategy-went all overIndia to sell their product with a

network of large distributors. Ayurvedic soap comprises 7

percent, of which we have 3 percent.

Medimix decided to woo the

stockiest and distributors andclaims there are 25-year-oldloyalties here.


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Targeted hotels- aggressivelymarket to over 3,000 small hotelsall over India, even in smalltowns.

Impressed Indian people and

even foreign tourist by themedicated quality of Medimix.

No compromise on the packagingor appearance or the perfume orcolour of the soap

Brand extensionVrinda tulisiSoap

Conducted an ayurveda Congressin Hyderabad and got animpressive response.


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MARKETING MIX FOR COLGATE

PALMOLIVE INDIA LTD

Products

CP would come up with anotherstrong brand name other thanColgate and Cibaca

In toothpowder, it would endorsethe development of ColgateAyurvedic Toothpowder' focusedtoward rural rich and consumingclass

It would also launch a specialtoothpaste and toothbrush forkids in the age group from 4-10years.


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Packaging

It will work to improve theenvironmental compatibility of allour packaging materials.


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Price

The price would largely be basedon the competitor's price

The pricing would be done on the

basis of price points


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Promotion

CP would be positioning Colgatedental white crme andtoothpowder towards rural rich

segment. Most of the promotional expenses

would be T.V. media

Apart from T.V., FM radio forurban population and MW and

SW radio would also be used


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Facilities

Colgate-Palmolive is committed to

the health and safety of their

employees and the communities in

which we operate, as well as theprotection of the environment.


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Business

Colgate-Palmolive will consider

environmental, health and safety

issues in all significant business

transactions, including

acquisitions, divestitures,

discontinuance of operations, and

entry into joint ventures.


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COLGATE'S BRIGHT SMILES, BRIGHT FUTURES


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COLGATE IMPROVES MARKET SHARE


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CONCLUSION


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First, let's take a look at the distribution networks of three

leading FMCG companies in India - Hindustan Lever

Limited, Colgate Palmolive and Britannia.

Colgate and Britannia now derive 35% and 30%

respectively of their turnover from rural markets

Britannia and Colgate, apart from Hindustan Lever, are

the only FMCG companies in India that derive over 30%

of their revenues from rural markets


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The success of these companies has as much to do with

understanding the psyche of the rural family as it have to

do with a rural distribution network.

In the end that FMCG companies will have to really gain

inroads in the rural markets in order to achieve double

digit growth targets in future

Ultimately the winner would be the one with the required

resources like time and money and also with the much

needed innovative ideas to tap the rural markets


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strategies off mcg companies in rural market

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